Consumer Confidence Index

A consumer confidence index is a survey-based indicator that measures how optimistic or pessimistic households feel about their finances and the wider economy. Respondents answer questions about current conditions and their expectations for jobs, income and spending over the coming months, and the answers are compressed into a single index number compared against a benchmark period. Well-known examples include the Conference Board index and the University of Michigan sentiment survey in the United States. Currency markets watch these surveys because consumer spending drives a large share of output in most developed economies, so shifts in confidence can foreshadow changes in retail sales and growth. Readings are judged against forecasts and prior months rather than in isolation, and appear on the economic calendar monthly.